Medicaid Expansion Opened a New Door for Disabled Blacks, Hispanics

The Medicaid expansion in 41 states that began a decade ago has helped low-income workers in numerous ways. Millions have gained health insurance for the first time under the program, which saves lives, stabilizes family finances, and adds a second layer of insurance to poor retirees’ Medicare coverage.

The expansion has also benefited the disabled, and particularly people of color, new research finds. This is an important finding for Blacks, Hispanics, and Native Americans, who have higher levels of disability and poverty, which federal disability benefits and cash payments under Supplemental Security Income (SSI) were designed to alleviate.

Expanding Medicaid so that it covers more lower-income workers has had a dramatic impact on the SSI and disability programs – in opposite directions – because Medicaid is so intertwined with both of them.

Black enrollment in Social Security’s disability insurance increased 11 percent between 2009 and 2020 in the 26 expansion states included in this study, compared with the states that chose not to expand their Medicaid insurance. That was slightly larger than the increase among Whites.  

Consider why Medicaid increased Black workers’ participation if they develop an injury or medical condition that interferes with working. When people apply for disability, they usually leave their jobs before submitting an application. But there’s no guarantee they will be approved. Quitting work can mean giving up their employer’s health insurance, and they may not be willing to take that risk.

Expanding access to Medicaid insurance changes that calculation, creating an incentive for more people with disabilities to apply. The expansion states, by raising the amount of income permitted for Medicaid eligibility, provide more potential applicants with a replacement for the employer health insurance they would have to give up.

A separate analysis produced more evidence that this is, in fact, happening: the share of people with disabilities who had employer coverage declined in the states that expanded their Medicaid programs. The largest drops in private coverage were in the Black population – who also saw the largest increase in disability enrollment – and among people who identify with more than one race or ethnicity.

In contrast to the increase in disability enrollment, SSI enrollment declined. Hispanic enrollment dropped 21 percent. White enrollment in SSI also fell, though by half as much. (Native American enrollment in SSI and disability was largely unaffected.)

SSI’s link to Medicaid is a direct one. The income limit for SSI eligibility is very low – $1,971 per month – but there’s a tradeoff: SSI is another avenue to getting health insurance. In most states, low-income residents with disabilities who qualify are automatically enrolled in Medicaid.

But when more people could get Medicaid in the expansion states, fewer chose the SSI route, triggering an enrollment decline. “Becoming eligible for Medicaid outside of the SSI pathway may have been a more attractive option” for many people, the researchers concluded.

To read this study by Becky Staiger, Madeline Helfer and Jessica Van Parys, see “The Effect of Medicaid Expansion on the Take-up of Disability Benefits by Race and Ethnicity.”

The research reported herein was derived in whole or in part from research activities performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium.  The opinions and conclusions expressed are solely those of the authors and do not represent the opinions or policy of SSA, any agency of the federal government, or Boston College.  Neither the United States Government nor any agency thereof, nor any of their employees, make any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report.  Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof.